Weekly Walk of Shame: BP's Beyond Belief

This Motley Fool series examines things that just aren't right in the world of finance and investing. Here's what's got us riled up this week. If something's bugging you, too -- and we suspect it is -- go ahead and unload in the comments section below.

Today's subject: Despite our difficult economic times, a rogue's gallery of corporations have apparently focused on their own short-term profits, to everybody else's detriment. While the financial industry once harbored all of the most prominent examples, BP (NYSE: BP) , has now reminded us that cluelessness and irresponsibility aren't only found on Wall Street.

You'd think that a reasonable company would have a plan in place to handle emergencies such as the Deepwater Horizon disaster. But as the weeks drag on since BP's oil rig in the Gulf of Mexico caught fire and collapsed, the company still doesn't seem to have a clue.

Why you should be indignant: Oil from the disastrous spill has already reached the Louisiana marshlands. Scientists now fear that it's reached the Loop Current, where it could travel to threaten the Florida Keys' coral reefs before moving up the East Coast. Ponder the long-term impacts to wildlife and the ecosystem; dead marine animals have already started washing up on shore. (When you start messing with our friends the bottle-nosed dolphins, oh man, I really get steamed.)

Beyond the environmental impact, let's talk cold economics. This disaster threatens fishermen's basic livelihoods, the affected states' tourism industries, and countless folks' quality of life. Louisiana's fishing sector represents $3 billion of the state's economy, and the Gulf is responsible for somewhere between one-fifth and one-third of our nation's fish and shellfish. About 19% of federal waters in the area have been closed, dealing a horrible blow to the seafood industry. That will have ripple effects for many businesses, including a likely spike in seafood prices.

So far, the most striking insult has been the litany of possible fixes BP has trotted out over the weeks, each less successful than the last. First we had the "top hat" and the "junk shot." Now BP's talking up the "dynamic kill" method, in which the company will attempt to pump "kill mud" into the hole. This word salad's driving me nuts, and it only convinces me further that these folks don't know what to do!

BP CEO Tony Hayward deserves star billing for this fiasco. According to The Wall Street Journal, he recently admitted that "it's 'probably true' that BP didn't do enough planning in advance of the disaster." And The New York Times reports that he once lamented, "What the hell did we do to deserve this?" (I'm sure the folks who live and work along the Gulf Coast will all shed a tear for him.) Hayward's self-centered remarks make Toyota's (NYSE: TM) recent safety problems and management missteps look like child's play.

What now: The outrageous unpreparedness BP has shown amid this disaster is mind-blowing. This is no fly-by-night operation; it's a major oil company that generated $16.6 billion in profit last year. However unlikely a catastrophe like this might have seemed, the company's lack of any emergency plan seems just brain-shatteringly stupid. The blame game that BP, Halliburton (NYSE: HAL) , and Transocean (NYSE: RIG) all played a couple of weeks ago doesn't exactly fill me with confidence, either.

WSJ recently exposed the oil industry's inadequate disaster plans for the dangers of deepwater drilling. Both Chevron (NYSE: CVX) and Petrobras (NYSE: PBR) have had serious issues on offshore platforms in the last 10 years. The paper also revealed that in a 2004 trade journal article, two BP managers concluded that although BP responded well to an earlier incident, "it had 'less focus' on the longer term and wasn't prepared for the nearly two weeks of round-the-clock response even the fairly small spill required."

Have corporate managers forgotten that truly good businesses need contingency plans for worst-case scenarios? Are they too busy patting one another on the back to ponder how things might go wrong? This short-sightedness isn't just the oil industry's problem; Wall Street seemed blithely unaware that "liar loans" and interest-only mortgages might one day blow up in their faces.

Responsibility and ethics are common-sense capitalism. Chasing short-term profits while pretending that nothing can ever go wrong is downright idiotic. Even the supposedly unsinkable Titanic went down without enough lifeboats for all its passengers. We all should have learned a lesson from that. The Deepwater Horizon disaster, and BP's blundering, ineffectual response to it, shows that some of us clearly haven't.

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I agree completely with your sentiment. Unfortunately, the root of the problem lies with the US Justice system. The Exxon Valdez oil spill was the worst in US history. I was a fisherman with my lively-hood ruined. Exxon made a pathetic attempt at cleanup and got away with it. Litigations stretched over two decades; many of the people impacted were dead before they saw any compensation. Ultimately, almost all punitive damages were dropped- Exxon walked with a slap on the wrist. Why should BP expect any different.

Nope. You are both wrong. America made a collective decision a long time ago to allow oil companies, with few exceptions to drill where they want. Some of that was because of the oil companies considerable political influence and part of it was a desire for cheap energy. The last 2 middle east wars have been about oil.

All we have to do to solve this problem is put a humongous tax on each gallon of gasoline and over the road diesel sold in this country. Bring the price up to more than $5/gal. Bingo. Demand is down, federal deficit is down, oil imported is down, alternative fuel, etc etc Never happen of course.

Driller101: Why make everyone [else] suffer because one company is carelessly unprepared for emergencies?

The other side of the "Bring the price up to more than $5/gal" argument is that you will crush whole industries in the process. Transportation, agriculture, aviation, automotive, shipping, national defense, and nearly every American who owns a vehicle will get hammered. Anyone who thinks that a simple tax-based price floor for oil is a good idea is an economic simpleton.

Not to mention that a spike in price is actually a reward for the oil companies...

One need only to look back to the earlier problems caused by BP. In 2005 they killed 26 people at a refinery in Texas City 2 years later another problem killed 4 more. As a process safety professional, I recognize from the Baker report on the causes behind these incidents, BP only cares about the profit and continually fail to take care of their plants and people.

In this report, BP cut maintenance year after year and process safety was largely neglected.

Having a gas tax that targets a specific constant rate for consumers would be a great way to start weaning everyone off of the crack in their cars. When it went to $4 hardly anyone flinched, and kept paying for gas, but started buying different cars and behaving differently. If we don't incent a change in behavior this problem will never go away. If there are specific industries that can demonstrate hardship, taxes can be rebated where the case is made. The problem with iCon4's argument is that it assumes we have no way to solve these problems, so we should just keep doing (or "keep not doing") everything the same way. A tax won't reward oil companies at all - it will fund the subsidies that they and others can use to develop alternatives. D'oh!

As for our country's love of unregulated drilling, it is delicious irony to see the WSJ complaining about lax regulation. Don't forget Congress tied the hands of regulators by passing a law mandating new lease approvals in 30 days or less - basically making it impossible to determine if anything is truly safe or reliable. However, I agree we need to avoid kneejerk single-issue reactions and start making some sensible, comprehensive policy to address the whole energy situation.

The scary thing about this whole incident is that BP and Transocean are normally companies that go overboard on safety. If it can happen to them, it can probably happen to anybody.

BP is obviously stumbling around trying to fix this thing. Anybody would be. No one has the capability other than another major oil company. The fact that they said before it happened that they could take care of something like this means little. No way to test for something like this.

Please don't expect the MMS to provide adequate oversite. They are underpaid, understaffed , and undereducated. Even with the best of intentions, about all they can do is make sure all the forms have been filled out.

Read www.theOilDrum.com to get expert opinion about BPs effort. What I got out of reading many pages of info is that human error was the cause and the cascading failures 5000 feet down are really hard to fix. There are over 20,000 people working more than full time trying to fix the problem.

Nothing is going to change for the better so long as we have Pocket-Stuffing-Pigs infesting the Halls of Congress. Give this recent Rich Smith Fool Article a read if want to know what our lawmakers are really all about: http://www.fool.com/investing/general/2010/05/18/highway-rob.... I am sure that BP already knows that several million in well targeted campaign contributions (legal or not) will be sufficient to transfer the billions in cleanup costs from them directly to the American Taxpayer! If it's good for the banks then it must be good for big oil as well! The only advice I have for the hardworking American Taxpayer is "OIL UP YOUR CHECKBOOKS!" because Washington is not finished with you yet.

If anyone saw the excellent 60 Minutes interview with one of the exploded oil rig survivors, they know that there is plenty of blame for BP, Halliburton and Transocean. If anyone heard the excellent NPR report on how Norway handles deep water drilling, they know there is a safer way. The fact that BP has no clue what to do NOW only makes it clearer that prevention should have been stressed earlier. Remove the cap on liability and I can guarantee this will not happen again. So far, BP has been at the least trying to solve the problem. That is way better than Exxon -- I company I still will not do business with due to how they stonewalled the claims from Alaskan fisherman, and are doing so to this day.

British Petroleum (BP) acted irrisponsibly because managment harbored the thought that they were taking too much time to drill the well. They took dangerous shortcuts and in short, not a good neighbor. The Obama administration has failed to see the big picture, the oil will follow the gulf stream up the east coast to Ice Land. On it's way contaminate the entire East Coast, not to mention the probable collapse of the producing formation structures which could cause adverse faulting of the deep sea beds because of depletion of the fluids. This problem has not as yet taken to full value. This could easily bloom to a TRILLION dollar problem. PS: I have sent 4 emails to the Horison email address of which none have even been read. BP needs to have their drilling license revoked!!!!

We are all outraged by this terrible accident, the catastrophic damage to the gulf ecosystem and to the livelihood of so many, the apparent unpreparedness of the drilling project itself and the published utterances of BP CEO Tony Hayward.

Consider the medical device field. A catastrophic product failure there can have serious repercussions, not only for a company, but its decision makers and directors, who can be held criminally liable if they are shown to have flouted regulations.

It is time for analogous regulatory framework within the oil industry. There is far too cozy a relationship between it and government. This disaster is not the first, and nor will it be the last until fundamental change is forced upon the industry.

The thought of a spell in jail might just have sharpened Tony's mind sufficiently to enquire as to the contingency plans in place to support his company's oil exploration, and whether they might not be appropriate to manage the risk.

what really pisses me off is the deniability, BP is going to fight this like crazy with lawyers to limit liability and sadly enough they might win. However they will screw a lot of people and will never admit fully to their wrong-doing. This is very sad. The way the CEO says that the impact of the spill will be low to the environment (what an asswhipe!!) and telling employees that they have enough money to pay... I would truly wish for bankruptcy for these guys were it not for the employees that have zero responsibility in this mess. I really wish that Obama goes after these guys with all his might

An analogy: You rent some farm land, raise a crop and sell it, as you have for years. At edge of farm are some is a cell phone tower. In a storm tower falls over the property line smashes the neighbor’s milk barn and milking machines etc. Accident causes loss of income to neighbor also. Who pays for barn and milking machine repair and who compensates for the loss of income, you or the farm owner?

BP rented some equipment from Transocean, had done so for years and gotten many “crops of oil” which it sold. In last rental, a blowout in Transocean’s BOP happen and spilled BP’s oil “crop” which damaged the neighbor’s hotel breach, spoiling hotel income (and other’s incomes too). BP has agreed to pay for the oil clean up. Does BP or the owner of the defective equipment pay for the hotel’s income losses?

If not Transocean but the renter BP pays, why would not you as renter of the farm, also pay? Explain why – what the difference is.

Stop the finger pointing and blaming, there is enough of that in Washington as they fleece America into Socialism (dictatorship). Use our brains to correct the emergency by stopping the oil from polluting the entire gulf stream.

What about a 60 inch or larger column placed over the escaping oil and gas which would then flow to the surface to be pumped and controlled. Also use HAY inside the boomers to absorb the oil. The oil could then be processed from the HAY at refineries;(yes, the horse and cow type hay). Yes, it would take a nations supply of HAY for clean up; and yes I saw this on internet, so give the pat on the back to the orginators! But the clean up would be positive and the flow then controlled till the blown well head is secured by offset drilling.

Although there is much to be said, and being said about the disastrous consequences of the oil spill and inadequacies of various parties responsible for cleaning it up, I would put the blame squarely on BP. This is another in a long line of devastating accidents it has had on US soil, and time and again, the root of such incidents has been BP's emphasis on cost cutting, which is a shameful reason to disregard worker safety and for compromising environmental responsibility in the process.

I am studying Oil trading and BP is one of the companies I used to hope to work with, but after learning about Alaska and Texas accidents and now this one, I don't think I want to go near the company.

What if they quickly manufacture water repellant wicks and attach them to buoys and drop them into the current to collect the oil. Once the wicks are saturated with oil, they can light them at the surface thus attracting and eliminating more oil.

Let Capitalism and the Free Market Ring Out! The greed and aggressive growth policy of BP has caused this mess. Look around your city. If it is anything like mine, there is a BP gas station every few miles. What can we do? What SHOULD we do!?! We should drive past those BP stations to fill up somewhere else. And, after BP has “finished” cleaning up their mess, the government should shut down all BP ocean rigs in the US border waters. BP has no business drilling for oil in these fragile environments.

Lets nationalize BP?? Good gawd this country is in worse shape than I thought. Screw it, lets nationalize every American Co. it's worked out very well for Cuba. Barely enough to eat, on and off utilities and a crap hole to live in but they have a great health care system. One accident no matter how tragic does not mean socialism is the answer, sorry obama lovers.

We have been paying around $6 a gallon for decades here in 'socialist' UK (now conservative/lib UK but I don't expect the price to come down). You and the people in the Gulf are paying the real price for your petrol, pollution!The environment is paying the price.

You have been on cloud nine with your cheap untaxed fuel and your inefficient cars for about a century. The chickens are coming home to roost.

Ordinarily I am small-government all the way, and here is my small-government solution going forward - a remediation tax on all energy companies. The government must use the money for research (how to clean up messes) and remediation (cleaning up messes). Clearly over the course of history Big Business has shown/is showing that they are unwilling/unable to do it themselves.

This feels very familiar as a previous Alaskan has pointed out. The whole situation is beyond sad and unfortunately for those areas impacted and to be impacted by the spill, there is no putting that genie back in the bottle. The affects will be felt for many thousands of years in areas most badly damaged by oil.

Blame is unimportant. Finding ways to produce energy and for that matter anything else that we need/consume that avoids killing off our ecosystems one bit at a time are key to our economy and in the end our ultimate survival.

I agree with a number of the comments that have been made. The company is responsible for the errors and damage that they have created but they can not shoulder all the responsibility. Most companies are not a humanitarian proposition. They are in it for the money.

If they make more money buying Congress so that they can do their work how they wish to and where they wish to and we buy their stocks because they are making more money for us.

We are all responsible. The government should do the clean up because there are so many more businesses and environmental concerns that will become affected by BP's failure to clean up the mess. BP should then be billed. And if any of you have run out of fuel in your motor boat at sea and had to have been towed in by the Coast Gaurd you know how expensive that is. It should be the same for BP. There should be no financial kindness for BP. I know this sounds like ;more bail outs because they are "too big to fail".

But our oceans, our coasts, our natural resources are too big to fail. Our natural resources is one of the reasons we became the power that we are. It is true in this day and age we have more intellectual properties but look at the EU their natural resources are considerably smaller than they once were. They have had a lot longer and more people using and abusing them. We should protect and replenish ours.

As an investor refuse to invest in companies that are not ethically and environmentally responsible. Hit them where it hurts the pocket book.

I'm sorry, the "you use gas so it's your fault too" crap does not hold water, or oil.

When a company decides to take on an engineering challenge like drilling a mile down, continencies should be in place already. It's not like they ahd that "top hat" waiting somewhere, they had to build it.

Not to place too much faith in the government, but someone there should be asking "what if" questions before they permit environmentally dangerous activities.

If you build a repair garage, the building inspector wants to know where the gas is going to go if a car has a leak, and the fire department will have a say in that also. Well, if the local guy can say 'what if", the Federal guy can't?

I don't see why at $3 a gallon we can't get gas that has been produced in an responsible manner.

Some 30 or 40 years ago a German newspaper published a cartoon showing cliche type industry bosses looking at some smoke stacks spewing dirt. The clothes they wear are disintegrating into rags and one guy says: "Isn't this great? We increased our profits by 10 %!". Nothing has changed because politicians are miserable cowards and/or corrupt. They are the ones that should represent the people as a balancing power and they badly fail the people.

As most politicians are like a mafia they protect each other and laws to really protect the people cannot be made. Politicians who fail the constituents should be removed from office forever and eventually be locked up for treason because they damage their own country while they cite patriotic phrases and go to church. We do not need such morons who milk the public and mock the voters with their selfish actions.

Though I hate violence (one of the very few things I hate) it seems that a revolution is the only way to introduce real reform. There have been peaceful revolutions but I am afraid the US people have been pushed to far to organise that. A new constitution would need to be really democratic and limit power in a meaningful way. Money and influence peddling need to be limited. Nothing against millionaires but I do not like billionaires because the latter have to much market power and power is the source of all evil.

As some of you readers know the US is patterned after ancient Rome. When Rome was somewhat democratic many public jobs were limited to a year but the senate could vote for extensions. Cesar avoided these limitations by staying away from Rome conquering much of the lands west of the river Rhine. When he returned he had stolen so much money from the conquered lands that he could bribe the whole country. So he bought people and positions and pushed honest people to the sidelines. As we know, that ended in civil war and assassination. We do not want any of this but the people in power should learn from history or they may be swept away. The latter I would like to see!

Isn't it time to develop wisdom and humane behaviour? Forget about power and wars? I cannot stop dreaming of paradise.

motoruse suggests that hay be used to clean up the oil spill. as a rural person, that doesn't make sense to me. straw is much more absorbent than hay, and costs about 1/4th as much as hay. straw, for the people who haven't had much experience with or read that many books about oat stems, is basically used for animal bedding and soaking up moisture in any situation that needs it. hay is basically dried alfalfa that is used extensively to feed domestic animals when quality pasture is not available or practical. this difference may seem trivial to motoruse, but i think it's important enough to eliminate him from heading any oil cleanup attempt using this method.

All of these opinions of what is and isn't best for the country, and what BP should or shouldn't have done are killing me. First, we can't deal without oil, atleast not yet. Thinking we can tax it away is foolish beyond compare.. you would only hurt everybody. The market will let us know when it is ready to shift from one energy source to another, its a simple matter of demand. When the ability to make and use other energy types becomes economically feasible for the masses, thats when things will change, so lets focus on that.

Secondly, while BP should have had a back up plan that WORKED, they did atleast have a plan. This oil spill is something akin to Katrina, and living on the coast of Mississippi, I can tell you first hand that you don't prepare for that kind of disaster. I don't care how many times you drill or practice, nothing can prepare you for that. This is different from the Valdez, the oil is not yet processed in any way, and while it will have environmental effects, the oil is not thick and not nearly as difficult to clean up.

Thirdly, my husband is a responder for the state, and he is working directly with BP and their subcontractors in dealing with this situation. BP has gone out of their way to hire local fishermen, businesses, etc. Not only will many fishermen actually profit from this, so do the hotels (most of which are filled due to the influx of workers), the casinos (again with the workers), the restaurants, etc. You want a good example? Workers are on site 24 hours a day (my husband has worked 12 hours per day every single day since this started, no time off)... BP is paying to have three different caterers come in to provide food. They could have hired just one, but in efforts to spread the money locally, they hired three. Efforts like this are going on non stop here.

Everyone seems to think plugging that hole is simple, it just isnt. The really sad part of this story is that so many people are trying to scam the system, saying they were in the fishing industry, but just now getting their license so they get some money out of it. The guys you aren't hearing about are the charter boat captains, who, even though most of the gulf is still open to fishing, word of mouth is stopping their work. People just arent coming. (That's a guess, I don't know any personally)

This whole thing is getting rediculous. Yes 19 percent of federal waters are closed to fishing, but theres still 81 percent open, and that isn't even including the state owned waters, much of which is still open.

I encourage each of you to get your facts straight on what is going on in the trenches, so to speak. BP is a big oil company, but that doesn't make them evil. They are doing more than I would imagine most would. And no, I don't work for or know anyone who does work for them... I just get tired of hearing all the bashing and finger pointing.

And all those animals you may be hearing about? At last count there were only 5 actual birds with any signs of oil. Dolphins and turtles that have washed up actually do that this time of year, and so far none have tested positive for oil issues. Also, for those who dont know it, tar balls are a naturally occuring event too.

I remember waiting in gas lines in 1973. At that time, every DC saber was rattling, every fist pounding, that we must invest in alternative energy and reduce our needs for oil, we need more regulation, blah, blah, blah. The problem is when you have government of big business, by big business and for big business, us 'little people' are merely the pawns.

I consider myself mostly a Libertarian and I agree with the comments about putting more tax on gas/oil and using the proceeds to encourage alternative energy.Just the fact that users of carbon fuels are causing harm to others with the pollution they emit is enough to make this tax justified.No one should be able to harm someone else without compensation.

Does this mean we should allow oil companies to take unimaginably stupid risks to minimize costs and boost profits?

"The market will let us know when it is ready to shift from one energy source to another, its a simple matter of demand.When the ability to make and use other energy types becomes economically feasible for the masses, thats when things will change, so lets focus on that. "

Right, I'm sure oil and coal company's won't spend millions discrediting anything or causing trouble. I mean, even the idea that we're damaging the environment via global warming hasn't been met with millions in attack ads. Wait, what? You say it HAS, golly guess we should put less faith in "the market" to do the right thing, after all corporations exist to make money for share holders (in theory, lately it's just the ceo's) and take matters into our own hands. Afterall, if it was up to the market, blacks would still be unwelcome at white counters and riding at the back of the bus. PEOPLE want change, markets want dollars.

"Secondly, while BP should have had a back up plan that WORKED, they did at least have a plan."

Prayer doesn't count as a plan.

From bp's exploration plan submission, section 2.7:

"A scenario for a potential blow out from the well which BP would expect to have the highest volume of hydrocarbons is not required for the operations proposed in this DP"

"This oil spill is something akin to Katrina, and living on the coast of Mississippi, I can tell you first hand that you don't prepare for that kind of disaster."

Uh-huh, Katrina was a hurricane caused by nature with poor human planning on containment, this is an oil spill caused by an oil company with no planning on containment. Just doesn't seem to be the same to me except as far as human negligence in pursuit of personal profit is concerned. Especially since until they CAN plan for it they shouldn't be drilling. Deep water drilling accounts for 6% of the worlds oil production, not US, world, given the dangers I'd say they should figure out how to stop something beyond one blow out prevention valve. Also, given that this is a man made disaster due to cut corners (like not listening to the engineers who were hired to cap this well and just barreling ahead so you can start production right away) I'd say that it's pretty much unlike Katrina which was an actual act of nature that was made worse by man.

"This is different from the Valdez, the oil is not yet processed in any way, and while it will have environmental effects, the oil is not thick and not nearly as difficult to clean up. "

What exactly are you basing the difficulty of the cleanup on? Firstly this is light sweet crude, which is far more pervasive in getting into areas like marshlands, making it far more difficult to remove. The Valdez was a surface spill, this is a spill 5000 feet below the surface. Perhaps you can tell me how you'd clean the subsurface contamination, which is far far larger than the surface? Perhaps you can explain what the differences in this oil will be since it's deeper than 1500ft? For that matter, even if it's "not as hard to clean" it's still very hard to clean. They're STILL cleaning the valdez 21 years on, and say they're only 1/3 of the way through. But I guess this will be cleaned up within the month eh?

I mean, it's not like Florida is still cleaning up a spill from 40 years ago.

"Thirdly, my husband is a responder for the state, and he is working directly with BP and their subcontractors in dealing with this situation"

AH the appeal to authority, perhaps I should take your word for this over that of, you know, experts who study this stuff and are actually involved.

"BP has gone out of their way to hire local fishermen, businesses, etc."

Which, as part of their contracts they have tried to get to sign waivers saying they will not sue. Oh, and who can forget that they refuse to release any data on the toxic aromatics seeping out with the oil and into the air so the fishermen know that the fact they're feeling sick doesn't mean they need a respirator, and aren't breathing carcinogens like kids eat candy.

And who can forget all the dispersant they're using which are the most toxic, are known from the valdez cleanup to cause human illness, and are carcinogens.

"Not only will many fishermen actually profit from this, so do the hotels (most of which are filled due to the influx of workers), the casinos (again with the workers), the restaurants, etc. You want a good example? Workers are on site 24 hours a day (my husband has worked 12 hours per day every single day since this started, no time off)... BP is paying to have three different caterers come in to provide food. They could have hired just one, but in efforts to spread the money locally, they hired three. Efforts like this are going on non stop here. "

three whole caterers? Wow, that's impressive. I'm glad they destroyed an entire economy consisting of tourist fishing, plain old tourism, commercial fishing, oyster farms, shrimp farms, and everyone who's depending on those people for their business, like retailers. I'm sure BP will be paying these people for their time, 6 million a day is what they're spending on this spill, a spill that is the worst in US history, soon perhaps the world. Maybe BP will pay the entire southern portion of the US to come out and clean up after it. You're right about one thing, this is non stop, for decades, because this cleanup will take many many many years. Hell Florida still has grasslands that smell of gasoline 40 years on. I imagine Louisiana has a new industry. I can see it now, "Come to Louisiana, cleanup capital of the US! Free respirators for the kids!"

I wonder how much of a "profit" we're going to see from the increased cancers from the PAH's in the air, or the oil in the water and wildlife. I'm sure if they ever bring back "freak shows" the children born with mutations will be set for life.

"Everyone seems to think plugging that hole is simple, it just isn't. "

Your right, this isn't simple to fix, which is why BP should have had to engineer a suitable plan before the rig was ever towed in. They should have had to put in place at least something other than one blow out preventer which they allowed to lapse from neglect of repair, or maybe just maybe listen to the people they hire to tell them how to cap the well and pour the cement and mud like they should have.

"The really sad part of this story is that so many people are trying to scam the system, saying they were in the fishing industry, but just now getting their license so they get some money out of it. "

Yes, it's sad that people have had their lively hood destroyed and are now trying to get involved in cleanup efforts or "scam the system" since BP has so generously screwed up everything. It's all the greedy fishermen and "wannabe" fishermens fault! They're the ones we should be blaming! With their dirty greedy scamming of hapless old BP.

"The guys you aren't hearing about are the charter boat captains, who, even though most of the gulf is still open to fishing, word of mouth is stopping their work. People just aren't coming. (That's a guess, I don't know any personally) "

Perhaps you should stop assuming you know the reasons they're doing it then, since you admit you have no insight. As for the "not hearing about" them, they've been in neigh every article I've read about the impact of this spill on the gulf's economy and that doesn't count the ones I actually know. They aren't coming because if 20% of the area is off limits to fishing and more will follow. Golly, people are going to be kind of unenthusiastic about fishing in the other 80% since nobody knows the dangers or size of this spill yet since BP, again, won't release any information, silly silly people.

"I encourage each of you to get your facts straight on what is going on in the trenches, so to speak."

I also encourage everyone, especially you, to get your facts straight with what's going on. We may need oil for the time being for our transportation, but that doesn't mean we need to give companies a blank check to do whatever they want in whatever fashion they want. Responsibility should be a hallmark of capitalism, instead it seems to be the first thing sold or discarded.

"BP is a big oil company, but that doesn't make them evil. They are doing more than I would imagine most would."

You're right, the fact they're simply an oil company doesn't make them evil. The fact they're running their business, which has huge impacts on the lives and lively hood of entire swaths of the US, with cut corners, by the seat of their pants planning, and utter disregard for human life and health, however, just might.

As for what they're doing, you're right, they aren't unique. All the oil companies do the same thing. They get a rubber stamp from the MMS, which is ultra cozy with the oil industry, to get the same pass on environmental impact studies that I'd get if I built an outhouse, they cut corners, they say "It wasn't our fault! It was Haliburtons and the Transoceans" and they proceed to concern themselves with the media spin and damage control rather than the actual cleanup.

Like, oh I don't know, saying there's no reliable way to measure the amount of oil going out, then saying that it's leaking 5,000 bpd. When the scientists and engineers say there are tons of ways to know from looking at the video alone and that it's somewhere around 70,000 bpd, a factor of 10 difference. Roughly a little more than every 3 days, it's pushing out the same amount of oil as the valdez did by these estimates. Course, they're sucking up 4000 barrels a day, what with that suction hose they just said wasn't working. BP of course prefers to rely on surface scans by satelite. Which don't show the underwater oil trapped in currents and therefore understate the amount spewed but hey! they're doing more than you imagine most would!

I mean, they're using unheard of amounts of dispersant. Of course, it's a dispersant that is the most toxic and least effective on the market for sweet crude, and when used in the valdez was linked to serious human health issues. Why would they use that I wonder? OH! it's because executives of BP has huge stockpiles of it and apparently there are economic ties between some of the management, add to that that it allows them to destable the surface oil so it gathers underwater where the satellites can't see it and BOOM I think we have a winnah!

And of course, I'd be remiss if I didn't mention all they're doing to threaten reporters and scientists are being threatened with arrest for showing up to view how bad it all is. I mean, surely BP doesn't have hooks so deep in the government that they can tell a branch of the armed services what to do. I mean, I can understand why the coast guard would be doing this since it's "Under BP's rules."

And let's not leave transoceanic out of this. The company that, since it took out more insurance than the rig was worth, will make a 200+ million profit on this debacle.

"And no, I don't work for or know anyone who does work for them... I just get tired of hearing all the bashing and finger pointing."

Wow, perhaps you should stick your head in the sand then so you don't have to listen to everyone take out their frustrations at the utter failure that is their responsibility up to the spill, and response to it. Shame on us for wagging our fingers at BP. I mean, look at all they've given us! Three caterers, a boom to our hotels and casinos from the cleanup workers, and all the free oil we can scoop off of the beach!!! We're such ingrates I tells ya!

Also, doesn't your statement that you know nobody who works for them get contradicted just a little bit by this.

"my husband is a responder for the state, and he is working directly with BP and their subcontractors in dealing with this situation."

"And all those animals you may be hearing about? At last count there were only 5 actual birds with any signs of oil. Dolphins and turtles that have washed up actually do that this time of year, and so far none have tested positive for oil issues."

YAY! only 5 birds!!! I guess that means we don't have to worry about the 1,270 kinds of fish to 1,461 types of mollusk that call these waters home. Or the plankton which will be decimated by the reactive oxygen created from the sunlight heating the PAH's! Or the fact that this will travel up the food chain in unheard of ways! Or that the reefs and corals will suffer! Of course we totally shouldn't worry that this is mating season for alllll kinds of short lived animals, like crabs, or that it's the time of year when about 25 million songbirds migrate thru and stop in the wetlands to breed or on their way further south. I mean, it's not like the air is going to be contaminated along with the water. surely the surface won't be a place of long term decimation for entire generations of short lived species which will require relocation to shore up the populations over time to stable levels. It's wonderful that nothing (so far) has tested positive for oil FABULOUS even, tomorrow however.

OMG!!! You're so right! Tarballs do occur naturally! I guess by the transitive property of idiocy then that means that 75,000 bpd is also natural! We should just relax and let nature take care of itself. I mean it's not like this is a man made disaster of epic proportions by a corporation that was, in my opinion the bush era DOJ would disagree, criminally negligent.

"Stop letting the media freak you out. "

Yes, because facts should never upset anyone. We should instead listen to the soothing platitudes of BP and company as they tell us "Come'on guy..don't be upset, we've got this alll under control. Trust us! Would we lie?"

Sincerely,

Lance from Louisiana

Someone who isn't completely uninformed of the realities of this spill.

Isn't this an investment website? How about investment advice? Is BP a buy now that it is so beaten down, a hold because we don't know the scope, or is it a sell because the costs are going to force them out of business? This is what I pay money for a subscription to this site in order to learn.

Yes, BP screwed up, but they also seem to be working pretty hard to address the problem. There was no drunk skipper ramming his barge into the rocks. Their (or, more precisely, their subcontractor's) billion dollar rig exploded and 11 people died. They will be on the hook for billions of dollars of cleanup and bad PR.

I find it hard to find any company that wanted this to happen, and although there may have been mistakes, there has yet to be revealed a smoking gun factoid indicating some fiendish British magnate twisting his mustache and scoffing at the environmental damage that is going to occur.

Some of us are BP investors. We would like some actual financial advice. How about we leave the holier-than-thou posturing to CNN and the New York Times?

But, Royalrover, this is the section called 'Weekly Walk of Shame'. I think therefore it quite appropriate for folk to express their views with particular regard to BP's handling of this Gulf of Mexico Oil Spill.

The chappie before you, seemed to have hauled out some kind of left over 'Thesis' on Off-Shore Oil Exploration. This could have writen by any student at any time during the past 20 years.

What I find hard to understand, is with so many 'Rigs', in the hundreds I believe, sucking-up the below Sea-bed Oil, & for so many years, comments like those made by Lance from Louisiana, give new & fresh meaning to the phrase, 20/20 vision in hindsight.

I don't see at this time, regardless of the outcome, of this awful BP incident, any slowing down of Deep-Sea Oil Exploration.

Some cat much earlier on, suggested a 'Govt Tariff', Tax whatever, to make Fuel so expensive as to reduce Demand significantly. Among the benefits he mentioned was 'Deficits Down'. I guess that he figures the additional Tax would help to defray the the necessity of higher regular Taxes to support Budgetary requirements.

I would like any of you geniusess to tell me how would this work if other 'Revenues' started to plunge, which I'm sure they would, owing to seriously Decreased Demand for 'Goods & Services'?

The Gulf of Mexico is not by any means the only place where Deep-Sea drilling & Extracting of 'Oil' is taking place.

I just stuck that thought in there 'willy, nilly', to maybe broaden the discussion.

Another point made that same Cat, is that there also would be a Decresed Demand for Imported Oil.

That I can't figure out, & by what Metrics & or Calculus made him arrive at that 'Belief', because I am sure quite the opposite would occur.

There is just one more point I think is 'SORELY NEEDED' for some deep thought, & serious consideration. What has anyone ever suggested could replace the 'Myriad' everyday 'Products' Mfg. by the 'PetroChemical Industry?

This is the one overlooked situation that needs as much immediate concern as this Oil-spill is generating, & that is:--------

I think the altenatives to 'Oil' need to be studied on a 'Timeline', that would start to see Implemtation & certainly Completion, before all the 'Recoverable Oil' is exhausted.

This in my opinion gives about a 30 year time-frame, for BEGINING to 'Replace Oil'. Again in my opinion it will take at least 100 years to be anything like Oil Independence can be achieved, & that is based on the Assumption that all the Genuis's will be we working assidously 24/7 365 days a year for the next min. 50 years on this Goal.

Unless you want to regulate every piece of equipment and practice in the oilfield, we have to make it hard for unsafe operators, even one as large as a bp to operate in the GOM until they prove they can operate safely. The BOP modification was made by transco at BP's request and cost. Transocean did not say no. BP directed that the heavy mud be displaced from the casing with lighter seawater even though the cement plug failed several tests and neither transocean nor halliburton said no. The regulations made over the last few years, like not modifying the bop to make it less effective, are voluntary thanks to Bush and Cheney. But just because it;s a voluntary reg, doesn't mean you should ignore it. Would you drive 65 mph on a really icey road just becuase the sign said you can? BP has made us all look bad. I've been reading the trascripts at the oildrum and BP just ought to sit out for a while and let another partner operate. And some of those voluntary regulations need to be non voluntary. Deep water is hgher pressure, bigger volumes, hence a possible bigger catastrophic event, not the place to drill and operate cheap. It was not human error, it was a systematic failure of planning and process.

planning is definitely not done properly in this case. there should at least be backup automatic shutoff valves so when fire is raging someone doesn't have to die while turning the valve off. I don't know much about the geology but what if an earthquake occurred where the are many rigs drilling. All the resources in the world would not help the environment then.

Someone above correctly put responsibility on the politicians. They are responsible for having the integrity, honesty, truthfulness and fair dealing in themselves so they might be able to create from such individual strength a business environment based in morality and integrity. I know there are some of them trying to do just that every day. But there are too many antagonistic, zero-sum obstructionist idiots who need to be voted out ASAP. The problem multiplies through the system of influence peddling called lobbying. [McCain tried to nail that issue but got shot down. Again(!) (Sorry, couldn't resist.)]

Do you know Congressional rules don't even allow enough time between the final version / printing of new bills and the call to vote to allow the larger ones to be read in their entirety? Our Representatives are voting on laws they haven't even read. That's insane.

Who makes such insipid rules? Congress! Who makes ALL the (federal) rules? CONGRESS. The Senate and the House of Representatives. They write the laws. They can over-rule the Judiciary. They can make it so Corporations are NOT individuals capable of buying influence through political donations. They can put a stop to influence peddling. They can do anything they (we, theoretically) want.

The solution is to VOTE when you have the chance. At every election for which you are eligible. Otherwise, you have no right to complain. If you're not making informed decisions at the polls then YOU are the problem. Your laziness via being a non-voter allowed the creation of today's political and business environments. OK, I'll stop there.

Sorry for the diatribe, but at least it makes more sense than 'Lance from Louisiana.'

I worked on and around rigs like the Horizon as a diver. There are more rules placed on rigs, boats, personnel, equipment and procedures working in the offshore industry than most people would believe reasonable (we were once told by these representatives that we could not urinate over the side of the boat while offshore due to environmental concern. We received a frosty glare when we asked how they got the whales to stop). The constant song is "Safety First" but the second verse is always a concern for the environment. What happened was someone didnt do their job. Rig personnel work long, hard hours with equipment and weighing hundreds of tons to get their jobs done. Sometimes you dont know if what you did is going to work until you try it. There is only so much you can check and if its working and the checks are negative its a go. Someone hid information or took a chance they shouldnt have (to save time (money)) or something was assumed without being fully checked-out. Several things went wrong at the same time in the correct sequence that caused this disaster. Now, I dont understand why the amount estimated to be leaking was initially so low, or if BP could have moved faster to get the needed system from shore to the offshore leak, but those systems cant be stored nearby and they take time to connect. The pipe needed to be prepped for a valve before the system could even be connected and that takes time to do with an ROV (its too deep for human divers). Not too mention that due to the depth, what is probably a muddy bottom and the leaking oil visibility was probably nil. Conclusion - preventive measures and backups were in place but people screwed up.

I agree with easyavenue In fact you have written blogs Ibut I'll bet none of you winers have ever written to your representatives Congress or Senators about anything meaningful with facts they can use to support an intelligent argument.

This is huge opportnity to profit from the bad news piled onto to BP. A little news for you. I was Deep sea Diver. BP is doing an outstanding job addressing the challenges before them in such deep water.

If you look at chart of XOM before and after the Valdez it's not even a speed bump. This is an opportunity of a life time and I bet they don't even cut the dividend. But I wouldn't buy right away but watch closely.

Yes, this is a horrible environmental disaster. Yes, BP is responsible. Yes, some people messed up. However, this was nothing more than an accident.

All the hand wringing about BP's timeliness and effectiveness with stopping the leak is ridiculous. There is nothing to be gained by being slow and ineffective. They have access to the most knowledgeable people in the drilling business and they have the most incentive to get it fixed. They are dealing with a problem that no one has ever solved before, so it will take time.

For those that think the government should take over and stop the leak... it took the same government 5 days to get water to the Super Dome.

What is the big deal about how much oil is leaking? Yes, the BP and Coast Guard estimate appears to have been low. If they had estimated 2 billion barrels a day and been too high, would that make you feel better? It's leaking so it needs to be fixed, regardless if it's 10 gallons a day or 10 million gallons a day.

The finger pointing and BP bashing by the media and politicians shows just how idiotic our society has become. Very constructive stuff...not.

Fix the leak, clean up the mess, and figure out how to keep it from happening again.

From Thursday’s (5/20/10) The Times Picayune (New Orleans’ local paper) “final test would have signaled seal trouble” (See; http://www.nola.com/news/t-p/frontpage/index.ssf?/base/news-... for the full article), apparently BP didn’t run a Cement Bond Log on the well before setting the bottom cement plug and displacing the heavy mud in the riser. The crew and equipment was on the rig but the wire line crew was sent home less than 12 hours before the blowout. It is suspected that bad cement bond between the liner and next outer casing allowed migration of gas & oil into the riser. It sounds to me that BP was trying to save a few bucks and it bit them, yes.

caburke37 wrote “I don’t understand why the amount estimated to be leaking was initially so low . . .” In an uncontrolled release of oil/gas/and or water, the flowing fluid also carries along some formation sand. The sand would tend to erode more of the cement and steel of the pipes causing a small leak, over time, to become a much larger leak. I have seen formation sand, mixed with water, erode and cut out hardened steel chokes and pipes within less than a half hour on some of my jobs.

He also said “ . . . if BP could have moved faster to get the needed system from shore to the offshore leak, but those systems cant be stored nearby and they take time to connect.” BP’s major “sin”, IMHO, was not having a disaster plan, a backup disaster plan, a backup-backup disaster plan, etc., etc. As soon as the blowout happened, they should have teams of engineers designing and having built equipment and tools to control the spill and KILL THE WELL!! Their first idea was to place a structure over the well to capture the oil & gas on the sea floor and pipe it to a recovery vessel on the surface. Due to the water depth and temperature, this failed due to the formation of gas hydrates ( if anyone wants, I can tell you more than you would ever want to know about hydrates, me. I wrote a research paper on them in 1979). When that didn’t work, BP tried inserting a pipe with packoff-type assembly into the broken riser and is, presently, collecting about 5,000 barrels a day of the leaking oil while another, estimated, 50,000 to 100,000 barrels per day of oil is still leaking into the Gulf. BP’s latest plan is to use the original choke and kill lines, connected to the BOP stack, to pump heavy mud into the well to do a “top down kill”. If all goes right, this operation will start this Tuesday. In my opinion, this too will fail, it should have been attempted much sooner.

From the sound of it, all the politicians in Washington are holding hearings and pointing fingers. It sounds good in the papers and on the TV news but it ain’t stopping the leak or cleaning up the mess. The local parish presidents and the governor wanted to use dredges to build sand barriers across areas of the Louisiana coast to prevent the oil from getting into the marshes & wetlands. After studying the idea for over a week, the bureaucrats finally nixed that idea this morning. By the time Washington decides something, It’ll be too late for it to work, IMHO.

Now then, when I’m elected dictator, I’ll tell y’all how I’ll fix this problem.

As just one more fool investor I battle the demons of GREED and FEAR in my search for capital gains. BP is in the oil business. In my opinion, we all depend on oil to help produce our food, clothing, and shelter. How long could we live without oil ? The CLEANUP of this messy oil spill will be VERY expensive and OTHER investing opportunities for ALERT investors are coming into play. All who do their homework BEFORE investing should make plenty of money out of this tragedy. Sad for the fishing industry. Good article from MF. Fool on as the clock is ticking.

Royalrover wrote “Isn't this an investment website? How about investment advice? Is BP a buy now that it is so beaten down, a hold because we don't know the scope, or is it a sell because the costs are going to force them out of business? This is what I pay money for a subscription to this site in order to learn. “

IMHO, BP is a sell at this time for the short term (6 or 5 years). I sold mine about 10 days ago at $48.98. I should have sold it when the news of the blowout first hit the news when it was around $60/share. Since I had bought it in March, 2009 at $34.55, I still made money on it. I’ll wait until they cap the well and the total cost of the cleanup, lawsuits, etc. are determined before buying again (if ever). I would also check to see who BP’s partners in the well were and not buy them at this time, me.

Within hours of the news of the blowout was released in the N’Orleans area, the sharks had their ads on TV <“If you were impacted by the Deepwater Horizon blowout, call the lawyers at the firm of Shyster, Shyster and Ripoff and we’ll sue the h311 out of them for you.”>. The president, in his infinite wisdom, has already ordered that no new drilling permits will be issued for the Mexican Ocean. This will impact the drilling companies, their crews and the companies that supply them (Diamond Offshore, Tidewater, Cameron Iron Works, etc., etc.). This order, IMHO, is short sighted at best. MMS will be reorganized and new regulations will be instituted, especially for drilling in waters below 1000 feet or so. This will take time, however. One of the problems the industry has is going to be the lack of experienced rig crews and engineers. If the rigs aren’t drilling, the crews aren’t getting paid. If the crews aren’t getting paid, they will find other lines of work and many won’t return. “Experience gained is directly proportional to the cost of equipment ruined“.

Thanks for all the thought-provoking comments, folks. I have been reading them all with great interest and appreciate that you've taken the time to share the thoughts and information.

And yes, this is an investing Web site and this article is about long-term investing and the kind of companies that some of us might want to avoid; my last line in the piece states that while BP may be perceived as "cheap" right now to some, the way this crisis has been handled and the gathering information as it has all unfolded (and as others point out, the possibilities of building costs, liabilities, and so forth, not to mention the political and public relations ramifications) does not strike me as a good stock idea, no matter how "cheap" it appears to get. In my opinion, it's showing itself to be a riskier one with each passing day.

I DESPISE articles written by those with little or NO experience in the Oil Field. The walk of shame should be the author NOT BP also tthe walk of Shame should be filled with those that voted Obama as president- how stupid can one get

I have been in oil for 24 years and first they have a double / tripple proven safety system for drilling. The mythical top shut off is Garbage- the two worst pollutors use it Brazil and Norway & NO ONE ELSE

#2 BP was not NOT the drilling contractor it was Transocean that caused this spill & it was their drill pipe, risers and BOP- NOT BP's

Hypeathetical Q for you

You pay a contractor to dig a trench on your land- you tell him there is a LNG line running thru it- it is his responsiblity to locate it- he digs, punches a hole in the line & blows up your home & 4 around you???? TO WHOM does the blame belong to?????

As many of my fellow Fools have pointed out, BP appears to have been totally unprepared for the eventuality which unfolded. However, I believe the entire oil exploration industry is unprepared for what has been experienced. Else, why has BP not enlisted the aid of other companys to stop this disaster? Why has our government not sought such aid? Does not the entire industry suffer as a result of this accident? Will not all hydrocarbon energy investors suffer from the pains of this event?

Perhaps hay (or straw) will not work: at least its proponent is attempting to make a proactive suggestion? I feel confident BP will examine all possibilities, and good luck to them. As an investor, I would not bet on BP at this time. But watch closely; a turn for the better could represent a huge buying opportunity.

BP was not NOT the drilling contractor it was Transocean that caused this spill & it was their drill pipe, risers and BOP- NOT BP's

That is not correct, the drill pipe and BOP stack were both probably rented from a third party. The company man on the rig was a BP employee. He told the electric line crew that a Cement Bond Log (CBL) was not required, which may have been part of the cause of the blowout. He also told the rig crew to displace the heavy drilling mud out of the riser with seawater before the top plug was set. This was what allowed high pressure gas under the riser to escape into the rig causing ignition and the original explosion and fire. The drilling contractor and crew worked for and under the direction of the company man and, in this case, BP. It was his and their (BP’s) responsibility to drill and complete the well safely.

BP appears to have been totally unprepared for the eventuality which unfolded. However, I believe the entire oil exploration industry is unprepared for what has been experienced. Else, why has BP not enlisted the aid of other companys to stop this disaster? Why has our government not sought such aid?

Not being employed by BP or in their morning meetings, I can’t answer questions about what BP may or may not have done to enlist the aid of other companies to stop this problem. Tomorrow (5/26/10) BP is going to attempt a top-down kill procedure on the well. The spokesman for BP gives it a 60% to 70% chance of success. IMHO, if I was working for BP, I would have tried this first. The longer the well blows, the harder it will be to kill. If I were a betting man (I’m not), I would give 8 to 3 odds against this procedure working, me.

The major problem is that BP is trying to work on a wellhead that is almost a mile below the sea surface where the water pressure is above 2,200 psi, the temperature is around 40 degrees F and the visibility is close to zero. Special equipment has to be imported and/or fabricated to work on this well. If it was me, I would have had chemical, explosive and also thermal cutters built to cut the riser and also the inner drill pipe 15 or 10 feet above the BOP stack, which would allow an external packoff & valve with flange to be clamped over the drill pipe. A second packoff assembly could be clamped over the riser and the flowing oil could be directed to a surface vessel for recovery. It would take time to fabricate this equipment and there is no guarantee it would work.

BP is also presently drilling two relief wells to pump heavy mud and, if that works, cement into the formation to kill the well. The problem with this is that it will be months (estimated in August) before the first of the wells reach depth to attempt the kill.

We, in the industry, had talked about the problems of a deep water blowout 15 years ago and how to clean it up if it happened. With a well blowing oil and gas in thousands of feet of cold water, we speculated that the mixture may be emulsified to a large extent, and with different underwater currents, may surface far from the blowout days or weeks later. This seems to be the present case. We all agreed back then that prevention was the best remedy. If BP caps the well tomorrow, the cleanup will go on for many months yet.

Back about 17 or 15 years ago, one company came up with a product, which was peat moss that was dried and treated to make it absorb oil but not water. The theory was to spread it over an oil slick to suck up the oil and, when it washed ashore, to spray it with a mixture of water wetting chemicals (detergent), oil eating bacteria and fertilizer. In tests it seemed to work well but the EPA and Coast Guard required the companies that used it to remove it from the marsh instead of allowing the bacteria to remediate it in place. The company no longer makes the product.